Many
in the media put the change down to
falling hardware sales, mainly through competition from both
the low-end market — typified by Huawei and Xiaomi — and the
high-end, which is owned by Apple.

However, some analysts are saying that this narrative is
wrong.

"I think that Samsung is very well positioned," said Susana
Santos, an analyst for IDC. "Even if it faces challenges because
the market isn't growing, it is well positioned."

The start of 2015 was rough for Samsung, with two quarters of
falling revenue but the third quarter — which came directly after
the launch of the S6 handset — saw
more positive results, growing profits to $6.4 billion (£4.3
billion). The S6 Edge, which features a unique curved display,
has been a hit.

"In the Android space, Samsung has been able to keep its share of
the market," said Santos. "It has been the likes of HTC and Sony
which have suffered."

A
report from Bloomberg suggests that the incoming
head, Koh Dong Jin, brings with him a new focus for Samsung,
moving the company's mobile division away from hardware — which
makes up all of its revenue — and towards software,
such as mobile payments.

"[Samsung has] established a strong position as one of key
technology's leaders in mobile devices but they need more
sustainable differentiation and distinctive value attached to
their devices this can only come from a shift to software and
services," said Roberta Cozza, an analyst for Gartner, in an
email.

"Based on Koh's career background, it suggests Samsung will put
more weight on its software focus instead of hardware," said
analyst Greg Roh. "The change shows that just the new cycle of
hardware offerings won't do much to revive growth. The new leader
will try to boost software power and foster new
innovations."

Samsung
wants to make more per phone by leveraging its
software.REUTERS/Kim
Hong-Ji

Apple has diversified its offerings away from hardware,
introducing new initiatives including an iPhone upgrade programme
— in which users pay $32 (£21) a month and receive a new phone
every year — Apple Pay, and Apple Music, a Spotify-like
subscription service.

Analysts for Goldman Sachs pegged Apple's potential revenue from
this subtle shift at
$7.6 billion (£5 billion) per month, without breaking a
sweat. It's clear that Samsung wants some of that.

Under Jin, who previously worked on Samsung Pay, the company will
likely move toward offering better software products, many of
which will come with a subscription, increasing the revenue
generated per device.

"The biggest threat to Samsung is definitely the competition on
the lower end," said Santos. "Local players, such as Xiaomi, have
been successful in entering local markets." Samsung is leaving
these markets in 2016, according to Santos, lowering the
company's exposure to these risks.

"The shift to software is necessary and will be a challenging one
for Samsung," said Cozza. "Samsung will need more resources and
expertise devoted to this and a truly transformative strategy
that will be able to generate software improvements that truly
puts the user experience at the center of everything they
do."

Samsung has a difficult path ahead, but the company's new focus
on moving to monetise users who buy its phones is smart and the
appointment of Jin shows that the company is willing to make
changes, even if it incurs bad press.